Eastern Vintner Becomes Major Player in Wine, Spirits Industry : Acquisitions: In the past two years, growth of Canandaigua Wine Co. has exploded. It has gained national status.

Richard Sands was a bottle-drinking, diaper-wearing 2-year-old in 1953, the year his father named Richard’s Wild Irish Rose for him.

For nearly four decades, the sweet, fortified dessert wine was Canandaigua Wine Co.’s flagship product, outselling all the company’s other wines combined.

But in the past two years, with the younger Sands as president, the Finger Lakes winery has snapped up wine and alcohol companies nationwide. Canandaigua Wine has catapulted from a regional company with half its sales in the dwindling dessert wine market to the second-largest domestic wine producer, selling everything from Corona beer to Paul Masson chablis.

“They’ve gone from minor to major very quickly,” said Paul Gillette, publisher of Los Angeles-based Wine Investor.

“They can’t continue at this rate. If they did, they’d be the only wine company in the world,” he said.

Although alcohol consumption has fallen nationwide, Canandaigua Wine sales have steadily risen, reaching $245 million last year, up from $70 million a decade earlier. Analysts predict sales will surpass $500 million in 1994.

Sands’ father Marvin, chairman of the company, founded Canandaigua Wine in 1945. His grandfather Mack was a wine bottler in Greensboro, N.C.

Sands says he never planned to follow in their footsteps. He studied math and psychology as an undergraduate, and received a doctorate in social psychology from the University of North Carolina at Chapel Hill, intending to become a professor.

But Sands became disillusioned with the academic world. In 1978, he moved back to Canandaigua to work for his father. In 1986, he was named president.

Sands, a tall 42-year-old with a graying mustache and curly hair swept off his forehead, said he shares his father’s management philosophy and the two work closely together. “They’re 100% consistent,” agreed Gillette.

Marvin Sands had been buying small wineries and expanding the business all along, his son said. But the biggest catalyst to Canandaigua Wine’s growth was its venture into the wine cooler market in the 1980s.

The company put its Sun Country wine cooler on the market in 1983 and watched sales soar to $71 million in just two years. In 1987 and 1988, as the market shriveled, Canandaigua Wine lost $13.8 million.

But the company had picked up valuable experience in waging a national advertising war. And distributors around the country had seen that Canandaigua Wine could hold its own against its bigger competitors.

“We gained a lot of respect,” Sands said.

From 1986 to 1991, Canandaigua Wine made $30 million worth of acquisitions--including Widmer Wine Cellars and Manischewitz kosher wines--replacing almost all its lost Sun Country business, Sands said.

In 1991, Canandaigua Wine splashed into the big leagues with the purchase of Guild Wineries and Distilleries Inc. of California. Buying Guild gave the company Cook’s Champagne, the No. 2 sparkling wine in the United States. More important, it gave Canandaigua Wine a foothold in California table wines, the largest segment of the wine business.

In 1993, Canandaigua surprised analysts by buying Barton Inc. of Chicago, which imports Corona and St. Pauli Girl beers and makes Barton gin and vodka. The Barton purchase doubled Canandaigua Wine’s sales and gave the wine company a broad base in spirits and imported beer, a growing market.

“They’ve gone from being a significant factor in wine to being a major factor in the total alcoholic beverage market,” said Ronald Strauss, an industry analyst with William Blair & Co. in Chicago.

With its latest purchase--the Gonzales, Calif.-based Vintners International, maker of Paul Masson and Taylor wines--Canandaigua Wine solidified its position in high-margin California wines.

The purchase gives the company 13% of the domestic wine market, according to a study by Impact, a trade publication. The privately owned Gallo has 27%.

Canandaigua Wine’s acquisitions have drawn nothing but admiration from industry observers.

“They buy cheaply, and it’s the prevailing opinion that they’ve stolen everything they got,” said Gillette.

“They are now a force to be reckoned with,” said Frank Walters, director of research at M. Shanken Communications in New York, publisher of Impact.

Analysts said the breadth of Canandaigua Wine’s holdings will give the company considerable clout with distributors and retailers. “They must have a brand with every distributor in the country,” said Jon Fredrikson, a San Francisco-based wine consultant.

The sheer number of the company’s products, some of which compete against each other, will be the company’s biggest challenge, Fredrikson said.

“It’s going to take some real ingenuity to develop a strategic focus,” he said.

Several analysts said they would be surprised if Canandaigua Wine made another major purchase soon. “I think they’ve got their hands full trying to sort out all the brands they’ve got,” Fredrikson said.

“If they’re going to take over IBM, God bless ‘em,” said Gillette. “But they’re not going to do anything more in wine, because there’s nothing more to do.”

But Sands says there will be more acquisitions. “There’s room for us to grow,” he said.